discounted cashflow analysis. this includes the use of both ht
internal rate of return and the net present value metrics. In the
exhibit below, the estimated net present value (npv) for the
proposed wind turbine is presented alongside a similar analysis of
natural gas, coal, and nuclear power generation. once again, two
panels in the exhibit correspond to July and October prices of
natural gas. under the July higher prices for natural gas, the
NVP of the gas-fired plant is very negative, which reflects the
fact that the price per kWh received from the plant is $0.10 while
the cost per KWh to produce power is $0.1018.
- Twepco Analyzed The Wind Investment Using Accepted Discounted Cashflow Analysis This Includes The Use Of Both Ht Intern 1 (47.51 KiB) Viewed 33 times
What are TWEPCO’s options at this point? What
would you recommend that the company do with regard to the wind
generation project? Specifically, should TWEPCO proceed with
the investment in wind power generation or not? Explain?
This question is from Chapter 24: Wind Energy Power Company,
Inc: Analyzing a Wind Energy Investment
Exhibit 24.5 The NPV of a 2,500 MW Power Plant Based on Wind, Natural Gas, Coal and Nuclear Power Panel A. Analysis Based on $6 per MMBtu Cost of Natural Gas in July 2008 Wind Turbines Gas Plant Coal Plant Nuclear Plant Total kWh Produced Annually 5,475,000,000 17,520,000,000 17,520,000,000 17,520,000,000 Rate of Return 11.43% -2.46% 17.63% 11.79% (IRR) Net Present $ 571,496,060 $ (3,805,099,843) $ 4,215,643,235 $1,402,348,242 Value (NPV) Cost per kWh to $ 0.0872 $ 0.1018 $ 0.0533 $ 0.0703 Produce Electricity Panel B. Analysis Based on $13 per MMBtu Cost of Natural Gas in November 2008 Wind Turbines Gas Plant Coal Plant Nuclear Plant Total kWh 5,475,000,000 17,520,000,000 17,520,000,000 17,520,000,000 Produced Annually Rate of Return 11.43% 26.60% 17.63% 11.79% (IRR) Net Present $ 571,496,060 $ 4,085,397,250 $4,215,643,235 $1,402,348,242 Value (NPV)